PRATHMESH CONSTRUCTION CO, MUMBAI V. ITO WD 17(3)(3), MUMBAI

ITA 545/MUM/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3696 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2016
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 20-04-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 21-01-2013
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 143(3); 80IB

Judgement Text

1 ITA 545/MUM/2013 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES C, MUMBAI BEFORE SHRI JOGINDER SINGH (JUDICIAL MEMBER) AND SHRI ASHWANI TANEJA (ACCOUNTNT MEMBER) I.T.A. NO.545/MUM/2013 (ASSESSMENT YEAR : 2007-08) M/S PRATHAMESH CONSTRUCTION CO C/O MR. H.S. NANDU ADVOCATE 228-A/3, LEELA BHAVAN NEAR KOLIWADA RAILWAY STATION SION (EAST), MUMBAI 400 022 VS ITO, WD.17(31)(3) MUMBAI PAN : AAFFP0873K (APPELLANT) (RESPONDENT) APPELLANT BY SHRI APURVA SHAH RESPONDENT BY SHRI MUKESH JAIN DATE OF HEARING : 27-04-2016 DATE OF PRONOUNCEMENT : 29-04-2016 O R D E R PER ASHWANI TNEJA, AM THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF LD.COMMISSIONER OF INCOME-TAX(APPEALS)-19, MUMBAI [ HEREINAFTER 2 ITA 545/MUM/2013 CALLED CIT(A)] DATED 10-10-2012 PASSED AGAINST T HE ASSESSMENT ORDER U/S 143(3) DATED 31-12-2009 FOR ASSESSMENT YE AR 2007-08 RAISING THE FOLLOWING GROUNDS OF APPEAL: 1) THE CIT (A) ERRED TO CONF111TI REJECTION OF THE APPELLANTS STATUTORILY AUDITED BOOKS OF ACCOUNTS. 2) THE CIT(A) FAILED TO APPRECIATE FACTUAL MATRIX A ND PRACTICAL REALITY. 3)THE APPELLANT'S NEGATIVE INCOME AT RS 37,34,685/- IN THE STATUS OF FIRM OUGHT TO HAVE BEEN ACCEPTED ASSESSED FOR BEING CARRIED FORWA RD IN THE SUBSEQUENT ACCOUNT YEAR. 4) THE AUTHORITIES BELOW HAVE HURLED HUMILIATION UP ON THE APPELLANT BY CASTING ASPERSIONS, (A) 'TO DEFRAUD REVENUE'; (B) 'THE COMP LETION CERTIFICATE IS OBTAINED FRAUDULENTLY' WITHOUT BRINING CLINCHING CONCRETE AD VERSE CONTRARY EVIDENCE MATERIAL UPON RECORD. 5) THE CBDT IN RESPONSE TO RTI APPLICATION ENLIGHTE NED THAT GOVERNMENT OF MAHARASHTRA STATE AND LAW MINISTRY OF CENTRAL GOVER NMENT BOTH TOOK VERY ELONGATED TIME WHICH WAS CAUSE FOR DELAYED ISSUANCE OF ENVISAGED NOTIFICATION UNDER SECTION 80IB (10). 6) THE CIT(A) AND THE ASSESSING OFFICER EACH ONE FA ILED TO WEIGH THE ARGUMENTS CONTENTIONS JUDICIOUSLY AND HAD UNJUSTIFI ABLY VIOLATED PRINCIPLES OF EQUITY RULES OF NATURAL JUSTICE. FAIRNESS TO THE AP PELLANT IS ABSENT ALL THROUGHOUT. 7) THE APPELLANT DENIES THE DETRIMENTAL TAX LIABILI TY AS PAYABLE HENCE INTEREST CHARGED UNDER SECTION 234B, 234C AND 234D DISPUTED AS NON APPLICABLE. 8) THE CONTENTIONS, EXPLANATION, PLEAS, PROOFS ETC PUT BEFORE THE LOWER AUTHORITIES WHATSOEVER THE CONTEXT APPLIES, IS IMPL ICIT KINDLY BE ADJUDGED TREATED AS SPECIFIC GROUNDS RENEWED HEREIN. 9) THE APPELLANT HUMBLY PRAYS MOST RESPECTFULLY URG ES TO CONDONE DELAY, IF ANY FOR PRESENTING THE APPEAL HEREIN WITHIN TIME PRESCR IBED, CAUSE BEING CIRCUMSTANCES BEYOND CONTROL AND FOR GOOD SUFFICIEN T REASON. THE LENIENCY IN THE MATTER EARNESTLY REQUESTED. 3 ITA 545/MUM/2013 3. DURING THE COURSE OF HEARING ARGUMENTS WERE MAD E BY SHRI APURVA SHAH APPEARED ON BEHALF OF THE ASSESSEE AND SHRI MUKESH JAIN, THE ID.DR ON BEHALF OF THE REVENUE . THE LD. COUNSEL SUBMITTED THAT HE IS NOT PRESSING ALL HE GROUNDS EXCEPT GROUN D NO.3 HENCE GROUNDS 1,2 AND 4 TO 8 ARE DISMISSED AS NOT PRESSED . WE SHALL ADJUDICATE GROUND NO.3 HEREUNDER. 4. - IT HAS BEEN SUBMITTED BY THE ID.COUNSEL DURING THE COURSE OF HEARING THAT ADDITION WAS MADE BY REJECTING THE BOO KS OF ACCOUNT AND ESTIMATING THE GROSS PROFIT OF THE ASSESSEE AND IN ADDITION TO THAT ANOTHER ADDITION WAS MADE BY MAKING DISALLOWANCES U /S 40(A)(IA).LT WAS SUBMITTED BY THE ID. COUNSEL THAT HE IS NOT DIS PUTING REJECTION OF BOOKS OF ACCOUNT AND ESTIMATION OF PROFIT. HIS ONLY GRIEVANCE IS THAT WHILE COMPUTING THE GROSS PROFIT RATE SOME MISTAKES HAVE BEEN DONE. THE GROSS PROFLT RATE OF FINANCIAL YEAR 2004- 05 AND 2005-06 WERE CONSIDERED AND AVERAGE OF THE SAME WAS ADOPTED AS GROSS PROFIT OF THE IMPUGNED YEAR. IT WAS SUBMITTED THAT SOME ERRORS WERE DONE BY THE ASSESSING OFFICER WHILE COMPUTING THE G ROSS PROFIT RATE OF FINANCIAL YEAR 2004-05 FURTHER SUBMITTED THAT ONCE INCOME OF THE ASSESSEE WAS ESTIMATED, NO FURTHER SPECIFIC DISALL OWANCE U/S 40(A)(IA) COULD BE MADE UNDER THE LAW AS THE SAME W AS BEYOND THE JURISDICTION OF THE ASSESSING OFFICER, AFTER ASSESS ING THE INCOME ON ESTIMATE BASIS. 4 ITA 545/MUM/2013 5. PER CONTRA, THE ID.DR SUBMITTED THAT THE MISTAKE S POINTED OUT BY THE ID.COUNSEL WERE NOT PLEADED BEFORE THE LOWER AU THORITIES AND THESE NEED VERIFICATION BY THE ASSESSING OFFICER. 6. WE HAVE HEARD BOTH THE PARTIES AND FIND THAT GRO SS PROFIT RATE OF AND 2005-06 HAVE NOT BEEN COMPUTED ON IDENTICAL BAS IS. IT IS RAETED THAT GOVERNMENT CHARGES, PLOT DEVELOPMENT CHARGES A ND ARCHITECHT'S FEE WERE NOT CONSIDERED WHILE COMPUTING THE GROSS P ROFIT RATE OF FINANCIAL YEAR 2004-05 WHEREAS THESE ITEMS WERE CON SIDERED AS EXPENSES WHILE COMPUTING THE GROSS PROFIT RATE OF F INANCIAL YEAR 2005-06. IN OUR VIEW, THE FACTUAL SUBMISSIONS MADE BEFORE US BY THE ID.COUNSEL CANNOT BE IGNORED AND REQUIRE PROPER VER IFICATION BY THE ASSESSING OFFICER. ANOTHER SUBMISSION OF THE ASSESS EE IS THAT ONCE INCOME IS ESTIMATED, THEN, NO FURTHER SPECIFIC DISA LLOWANCE / ADDITION I.E. DISALLOWANCE U/S 40(A)(IA) COULD HAVE BEEN MAD E, ALSO REQUIRES SERIOUS CONSIDERATION BY THE ASSESSING OFFICER. UND ER THESE CIRCUMSTANCES, WE FIND IT PROPER TO SEND THESE ISSU ES BACK TO THE FILE OF ASSESSING OFFICER. THE ASSESSING OFFICER SHALL T AKE INTO ACCOUNT ALL THE SUBMISSIONS AND EVIDENCES AS MAY BE FILED BY TH E ASSESSEE AND SHALL CONSIDER THE SAME ON OBJECTIVE BASIS TO WORK OUT AN APPROPRIATE RATE OF GROSS PROFIT WHILE ESTIMATING THE INCOME OF THE ASSESSEE. THE ASSESSING OFFICER SHALL ALSO CONSIDER ANY OTHER SUB MISSION OF THE ASSESSEE I .E NO DISALLOWANCE SHOULD BE MADE U/S 40 (A)(IA) ONCE INCOME OF THE ASSESSEE IS ASSESSED ON ESTIMATE BASI S. 5 ITA 545/MUM/2013 THE ASSESSEE IS FREE TO RAISE ALL LEGAL AND FACTUAL ISSUES BEFORE THE ASSESSING OFFICER FOR WHICH THE ASSESSEE SHALL BE G IVEN ADEQUATE OPPORTUNITY OF BEING HEARD. THUS, WITH THESE DIRECT IONS, THE AFORESAID ISSUES ARE SENT BACK TO THE FILE OF THE ASSESSING O FFICER FOR FRESH ADJUDICATION. ALL OTHER GROUNDS ARE DISMISSED. 7. AS A RESULT, THE APPEAL MAY BE TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING. SD/- SD/- (JOGINDER SINGH) (ASHWANI TANEJA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DT : 29 TH APRIL, 2016 PK/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REV ENUE, 'B' BENCH (TRUE COPY) BY ORDER ASSTT.REGISTRAR, ITAT, MUMBAI BENCHES